Cable & Wireless profit falls 24%

GarethVaughan

LONDON (CBS.MW) -- Cable & Wireless posted a 24 percent drop in full-year profit before tax and exceptional items as it sold traditional telecom assets and splashed out on the development of its Internet network and infrastructure.

“These results reflect the speed and scope of the transformation of Cable & Wireless over the last year,” Graham Wallace, Cable & Wireless’ chief executive said in a statement.

“Our strategy and market focus are clear, to be a leading provider of Internet Protocol and data services for business customers. Everything we have done in the last year has been to implement this strategy,” Wallace added.

The company’s capital expenditure increased by 52 percent to 3 billion pounds as it ploughed money into developing its global network and infrastructure and bought eight business Internet service providers in Europe.

Rising Japanese traffic

C&W also became the first foreign company to win a contested takeover battle in Japan last June when it won control of International Digital Communications Inc. The British company said IDC now carry’s some 25 percent of Japan’ Net traffic.

Back in February C&W struck a deal with Internet start up Pacific Century Cyber Works Ltd [s: pcclf] to sell its controlling stake in C&W Hong Kong Telecom Ltd [s: hkt] for up to $38.1 billion in cash and stock. Shareholders are due to vote on the deal at C&W’s annual general meeting on June 13.

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